Gov’t misses T-Bill target again, analyst warns of budget risk
By: Rebecca Okine
Economic analyst at Zed, Emmanuel Boateng, has raised concerns over the government’s recent shortfall in Treasury bill auctions, warning that the development could have broader implications for fiscal planning and public service delivery.
His comments follow the latest auction results released by the Bank of Ghana, which showed nearly a 20% undersubscription. Out of a target of GH¢6.684 billion, the government secured GH¢5.353 billion in total bids but accepted only GH¢2.762 billion. The bulk of the interest came from the 91-day bill, which drew GH¢4.361 billion in bids, with GH¢2.093 billion accepted. For the 182-day bill, a total of GH¢731.2 million was tendered, with GH¢513 million accepted.
Mr. Boateng explained that the government’s inability to meet its short-term borrowing targets could lead to a financing gap, potentially disrupting budgeted expenditures. “Shortfalls in expected borrowing can affect planned spending, particularly on key public services,” he said.
He further highlighted that the government had indicated in the 2025 budget its intention to rely heavily on the domestic market for financing, limiting dependence on external sources such as the IMF or World Bank. As a result, consistent undersubscription in the T-bill market could constrain the government’s fiscal space.
Despite the concern, Mr. Boateng believes the government may be intentionally moderating its borrowing to avoid high interest costs. “What I see is that they are trying to manage borrowing costs. They may be holding back in hopes of securing lower rates in future auctions,” he added.
He also pointed to declining yields on Treasury bills as a possible reason for reduced investor enthusiasm. According to him, rates have dropped significantly compared to previous months.
“At some point last year, investors were getting up to 30%. Now the average is just around 14%. Naturally, investors are less attracted when returns fall this sharply,” Mr. Boateng noted.
He cautioned that if government spending continues to slow and investor confidence weakens—especially amid uncertainty around inflation and interest rates—it could further impact the performance of the domestic debt market. “To regain traction, the government may need to restore certainty around inflation and show clear signs of economic activity, especially through actual spending on the ground,” Mr. Boateng said.
